Home News US state dept urges El Salvador to be ‘responsible’ about Bitcoin adoption

US state dept urges El Salvador to be ‘responsible’ about Bitcoin adoption


On June 30, Victoria Nuland met with President of El Salvador Nayib Bukele and Foreign Minister Alexandra Hill Tinoco as part of her visit to the republic.

During her visit to the Latin American country, Nuland noted the need for clear rules for the cryptocurrency.

Nuland also noted that Bitcoin is under scrutiny in the US. Following its use in recent ransomware attacks on US companies, including the Colonial Pipeline. And calls on the El Salvadorian authorities to take a similar position.

In May, hackers managed to break into a computer network with the Colonial Pipeline company. Due to the attack by malefactors, the company forced to stop fuel supplies to several densely populated American states. As a result, Colonial Pipeline paid the hackers about $ 5 million in Bitcoin to restore access to the network.

On June 8, it became known that part of the money stolen from the Colonial Pipeline was returned. FBI Deputy Director Paul Abbott said law enforcement authorities seized 63.7 Bitcoins ($ 2.3 million). Which were on the wallet of the DarkSide hacker group.

US reaction to El Salvador’s decision

El Salvador is the first country in the world to legally recognize Bitcoin as an official means of payment. The corresponding decision made the country’s parliament on June 9. Every adult in the country who installs the state-developed Chivo crypto wallet app will receive $ 30 in Bitcoin.

However, international financial organizations represented by the World Bank and IMF criticized this decision of the authorities of El Salvador. In their opinion, the integration of BTC into the traditional banking system will undermine its stability.

The US also reacted to El Salvador’s decision.

Deputy Head of State Victoria Nuland called on the government of El Salvador to ensure reliable regulation of Bitcoin transactions. Thus, Victoria Nuland, at a recent meeting with Bukele, appealed to his government to do everything they can to regulate Bitcoin, as well as avoid any possible illegal activity that may be associated with cryptoassets.

Nuland stressed that the US is still extremely skeptical about the prospects for Bitcoin. Cryptocurrencies are often used by hackers and scammers and this should be remembered in the government of Nayib Bukele.

However, El Salvador may not go the same way as the United States of America. So, the adoption of BTC with possible sanctions will enable local residents to purchase an uncontrollable option of receiving money transfers that they desperately need. In addition, legalizing BTC as a legal vehicle will provide the region with access to foreign capital willing to invest and develop industries in El Salvador.

Agreement with the International Monetary Fund

During her stay in El Salvador, the Deputy Secretary of State expressed the hope that the country would nevertheless reach an agreement with the International Monetary Fund (IMF) to continue the funding program.

Earlier, a representative of the institution said about the risks and regulatory problems that may result from the decision of the country’s authorities regarding the cryptocurrency. JPMorgan analysts stressed that the legalization of Bitcoin could jeopardize negotiations with the IMF.

Recall that another global financial institution, the World Bank, refused to provide assistance to El Salvador in the implementation of the cryptocurrency.

The Central American Bank for Economic Integration, on the other hand, promised assistance.

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